In 1994 the Centrelink benefit was about 46% of the median income; now it is about 30%. Photograph: AAP

Long-term unemployment is perhaps the most insidious of economic diseases, and last month saw Australia’s long-term unemployment rate reach its highest level since 2004. In October, 1.15% of the labour force, or 141,600 people, had been looking for work for more than a year – the highest rate since August 2004.

In 1988, when I finished my Year 12 exams, the unemployment rate was 6.7% – the lowest it had been for seven years, but even better, it was falling. My school friends would muse about what university subjects we would do and phrases like “pick your job” were thrown around half seriously – after all, in 1989 the economy was growing at an annual rate of 5.2%.

In 1993, by the time I had finished my economics honours degree exams (20 years ago to the day last Saturday), the unemployment rate was 10.9%. The youth unemployment rate for 15-24 year olds was 18.5%. The situation was so bad that in June that year, 37.1% of all unemployed people had not held a full-time job for more than a year – the highest rate ever recorded and well above the current figure of 20.8%.

And I found myself one of the long-term unemployed.

For most of 1994 I was unemployed. By 1995 I was living in Cairns and had only got work in a couple fairly low-paid jobs. I was trapped with too much education and too little experience, and as the economy began to improve I was competing more and more for entry-level jobs against those with experience who had either lost their jobs in the recession or were re-entering the workforce.

What saved me was a course run through the then commonwealth employment service for the long-term unemployed to train to be dealers in the casino being built in Cairns. I had gone to university hoping to one day be a dealer on the foreign-exchange market, and now I was to be dealing blackjack.

It wasn’t my dream job, but I jumped at it. The chance to earn the dole while doing a course which would almost guarantee me a job was a godsend. Learning a trade gave me back some hope.

Within two years, of course, the casino work nearly sent me mad, but it enabled me to work part-time and head back to university to do more study which, to cut a long story short, ended with me many years later writing this blog for Guardian Australia.

Although the unemployment I experienced was directly after university, the RBA’s recent statement of monetary policy noted the biggest growth reason for long-term unemployment is involuntary job loss.

Crucially, however, there has also been a significant increase since 2010 in the numbers of former workers now re-entering the workforce.

As the RBA notes, the unemployed can be divided into a few sections. The level of those who are unemployed for less than a month – consisting mainly of people leaving one job for another – hasn’t changed much over the past 10 years.

The big jump of late has been in the numbers of those unemployed for up to six months.

This does not auger well for the long-term unemployed. The length of unemployment acts a bit like a concertina – the more people looking for jobs, the more people are fighting to be one of the lucky “short-term unemployed”, which pushes more people into the mid-term bracket, who then fight for jobs and which pushes even more people into the long-term unemployed camp.

And the biggest victims of this pushing around are – much like me in 1993 – the youth.

From 2002 to 2009 the rate of long-term unemployed for each age breakdown was almost the same. Since then, while the rates of those between the ages of 25 and 54 have stayed together, the youth long-term unemployment rate has diverged sharply.

The government’s policy is to offer cash incentives to long-term unemployed. They will get $2,500 if they get a job and keep it for 12 months, and a further $4,000 if they keep it for 24 months. It will also offer people up to $6,000 to move to a regional area to take up a job.

As much as I dislike “anecdotal evidence”, for me, back in 1994-95 that money wouldn’t have made me any more or less likely to find a job. For me, it was the training that worked. I didn’t need an incentive to get a job, in the end I needed to learn a skill to get one. The sense that I could learn a trade that would enable me to do something other than pick fruit or be a kitchen hand (which I had worked as during my time at university), was the lifeline I needed.

Specific training programs for the long-term unemployed are also necessary not just to help them get employment, but to keep them in the labour market. Training helps fight the disease of loss of hope – it gives them the motivation to fight for a job.

What also helps is money to live. When I was unemployed the dole was about 46% of the median income; now it is about 30%:

And people need money. If you can hardly afford to live it’s next to impossible to not only present yourself properly for jobs, but also to keep up any hope.

And the truth about the long-term unemployment rate is that it will continue to rise while the overall rate rises. But without training and without hope, when the overall rate falls, the worry is the long-term unemployed will be unable to take advantage.